Centuria spends $167m on healthcare assets

Perth Clinic is being picked up at a 4.05 per cent yield.

Centuria has purchased seven fully leased essential services investments for its Healthcare Property Fund (CHPF).

The acquisitions double the number of properties in the portfolio to 14.

Vermont South Private Hospital cost Centuria $51.7 million last year.

It also increases the open-ended trust’s value 95 per cent – to $342.3 million.

CHPF was launched last August; the manager has now conducted four raisings for it – all up attracting $192m.

Six months ago the fund outlaid $57.3m on private medical centres – at Coffs Harbour, Cairns and Brisbane.

Late last year it spent $115m on three short-stay hospitals anchored to Nexus Hospitals, in Orange, Vermont South (Melbourne) and Hobart.

The new properties

The latest properties are costing Centuria $167m on a blended passing yield of five per cent.

The priciest, Townsville’s Weststate Private Hospital (artist’s impression, top), is setting it back $60.5m on a funds-through basis.

At 2-14 Wilson Street, West End, the short-stay facility will contain four operating theatres, a procedure room and 41 beds – 22 for overnight patients.

The five storey structure will spread over an 8000 sqm site, also with Lamington Road and Sturt St frontage.

Of the seven new assets, this one offers the longest Weighted Average Lease Expiry – new operator Weststate committing for an initial 25 years.

The purchase price reflects a six per cent passing return.

Lowest yield in Perth

In Perth, Centuria has spent $50.1 million for the city’s largest mental health hospital.

Perth Clinic, at 21-29 Havelock St, contains two buildings with a total 4856 sqm of area, including offices.

Its WALE is 11.6 years.

The deal is being struck on a 4.05pc passing yield (story continues below).

Sunbury Medical Centre is selling for $28.6 million.

Melbourne, Sydney

Centuria is outlaying $28.6m – a 4.49pc return – for the Sunbury Medical Centre, at 38-44 Gap Rd, in Melbourne’s north west, following a deal by Colliers’ Shalain Singh.

Across town the manager has also picked up a state government backed mental health outpatient centre, at 411 Nepean Rd, Frankston, for $12m (a 4.9pc yield) – after a campaign by Gross Waddell ICR’s Andrew Waddell with Hannan Real Estate’s Graeme Hannan.

Two other assets – dementia care units in Sydney’s Castle Hill, each costing $3.7m – are being purchased on a funds-though basis.

Upon completion by FY23, these are set to be occupied by Group Homes Australia for an initial 15 years.

Each unit will accommodate about 10 residents.

Both are being acquired at the same return – 5.75pc.

Elsewhere in the NSW capital, the fund has snapped up the MetroRehab Hospital, at 175 Addison Rd, Petersham.

The 37 bed facility is trading for $8.45m – a 5.09pc yield. Its WALE is 13.2 years.

Fund WALE increases

With these deals, CHPF’s WALE increases from 7.4 years to 11.4

“We are pleased to expand CHPF not just with additional high quality assets, but with assets that further geographically diversify the portfolio as well as diversify the fund into mental health,” the trust’s managing director, Andrew Hemming, said.

“Mental health hospitals, for both inpatients and outpatients, are a major growth area within the healthcare sector,” he added.

“Equally, dementia care operators that provide personalised, non-institutionalised homes – such as GHA – are growing in demand,” according to the executive.

The manager also announced today that it secured Nexus Hospitals for another 20 years at the Vermont South Private Hospital.

The landlord also extended a rental agreement with BGH Capital at Forrest Family Practice, South Bunbury, 170km south of Perth.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.